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The 1998 Utility Regulators Forum Four States, Eight Views: Looking Back on Deregulation
Policymakers reflect on how it "coulda been." Nearly all insist "my state did it best."
California, Massachusetts, New Hampshire and Pennsylvania have deregulated their electricity markets. Yet they're all ironing out wrinkles. California at press time was bracing for a vote on the Proposition 9 recall petition. New Hampshire still faced federal lawsuits filed by Public Service of New Hampshire seeking to quash efforts to bring competition to the state. (See, U.S. District Court, Concord, Docket No. 97-97-JD; U.S. District Court, Providence, Docket No. 97-121-L.) In addition, an October hearing was set at the 1st Circuit Court of Appeals (Docket No. 98-1764) in Boston on the appeal of a temporary restraining order blocking deregulation.
Time has come to look back on these restructuring efforts and evaluate what might have been done differently in these states, or what should be done in other states only now beginning to formulate policy.
With this in mind, we asked policymakers to reflect on what they might do differently were they to do it again. Each participant was asked the same questions:
Deregulating Over Again. If you had to deregulate your state's electricity market again, how would you do it differently?
Learning From Mistakes. What mistakes were made? What did you learn from them?
ISO vs. Transco. For the Californians, if you were to visit restructuring again, would you put aside the model of a non-profit independent system operator in favor of a for-profit Transco that owns the grid as a going concern? For other states, should you start off with a Transco instead of an ISO? Either way, do you wish you had more input in what was largely a federal process to choose the ISO?
Interventionist or Free Market? In consumer education and in promoting conservation and renewable energy, should you have leaned more toward a interventionist position or a free-market approach?
Learning From Others. What did you learn from states that have come after you in the deregulation process? Or, if applicable, from those who preceded you?
Plants For Sale. Is the quick selloff of generation good, or will it hurt state interests in the long run?
Who's Best? What state has had the most successful deregulation process?
CALIFORNIA: Jessie J. Knight Jr. and P. Gregory Conlon, commissioners, California Public Utilities Commission.
Coming from the San Francisco Chamber of Commerce and several high-profile corporate positions prior to joining the commission, it's easy to understand how Knight brought a free market perspective to his state's restructuring process. In the state's restructuring order, he dissented from the majority opinion, which was led by Conlon, the commission's coordinator for the electricity industry. The main difference between the two sides was that the majority felt the power exchange was essential for a robust market for small consumers; the minority felt the market could have gotten to the same place without the formal structure. Conlon says he's not an interventionist, that he "falls in the middle" and is for competition.
Jessie J. Knight Jr.
Commissioner, Calif. PUC
?Deregulating Over Again.
"I would have been even more fanatical about introducing